But it's also
facing a struggle in its hometown of San Francisco, despite
backing from Mayor Ed Lee, and the president of the Board of
Supervisors, David Chiu, the San Francisco Chronicle
reports. There, the issue is the way Airbnb rentals have taken
long-term rentals off an already tight market.

The law is pretty clear.

According to Chapter 41a of San Francisco's Administrative
Code—which we actually read—renting an apartment or home for less
than 30 days is
straight-up illegal in San Francisco unless you get a
bed-and-breakfast permit or jump through other arduous
bureaucratic hoops. Violators may face a fine of up to $1,000 or
six months in jail.

(By the way, if you're a renter, subletting your place will
likely violate your lease and can get you evicted. and the law is
silent, as far as we can tell, about the notion of renting a room
or a couch in a private residence.)

San Francisco's Board of Supervisors is considering changing the
law. Lee and Chiu are pushing the buzzword of "collaborative
consumption" to cover notions like Airbnb rentals and services
like Getaround, which lets you rent out your car.

The problem for Airbnb is that it's basically relying on Mayor
Lee and Supervisor Chiu's clout to push through changes. (Airbnb
investor Ron
Conway was a
major backer of Lee's election campaign.) But the city's
political environment is extremely fragmented and driven by
interest groups like the San Francisco Tenants Union and the
Telegraph Hill Dwellers which—no surprise—hate the idea of
Airbnb.

If Airbnb has any hopes of getting a legal change through, it's
going to have to arduously court those groups—not just the mayor
and supervisors.

In the meantime, though? Airbnb rentals are going to keep
happening under the radar. They're too hard to police, and one
thing Lee and Chiu can do is rein in any attempts to enforce the
law.

It reminds us of PayPal's strategy back in the day. The payments
startup just started moving money around without all of the
money-transfer agent licenses it needed. It eventually got in
compliance with the law, which was a bureaucratic, state-by-state
nightmare.

If it had waited around to get those licenses first, another
startup might have beaten it to the market. But it's not like
PayPal was
in that much danger. Any attempt to shut it down would have faced
a chorus of complaints from eBay sellers
who'd already come to depend on the service.

The political challenge for Airbnb is that hosts may be reluctant
to speak up in its defense—since that would call attention to
their own violations. Meanwhile, its critics have already proven
themselves to be noisy.